Commercial surveying news from the Beattie Partnership

1 April 2015: How this Affects 2017’s Business Rates

The Valuation Office is currently collecting information from businesses about their rental values, because future rateable values for commercial properties will be based on this data. How significant is this?

The last rates revaluation for commercial properties was in 2010, the next one should have been this year but it has slipped a couple of years and will now take place in 2017.

Had the revaluation taken place within its five-year schedule, the rental values being looked at would have been from 2013 not 2015. The economy is in recovery and reports over the past year indicate that rental values are now rising. This makes the 1 April 2015 particularly significant in determining the kind of rateable values that will be set in 2017.

UK commercial property markets have recorded some of the highest growth figures in rental value since the second half of 2007.

You get a real sense of an underlying momentum to commercial rental recovery. This isn’t all good news because, from a business rating viewpoint, it is going to push up rateable values, and therefore business rates, in 2017.

This means that the last business rates revaluation was based on pre-crash data collected in 2008 and the next one will be based on post-crash information coming at a time of recovery. Effectively business rates will not have reflected the economic downturn, despite its considerable impact on businesses themselves.

It is important that businesses take into account any factors, which might have a negative impact on their business rental value as at 1 April 2015.  It is easy to think of the 2017 revaluation as being sometime in the future, but it’s what happens now that will make all the difference.

The consequences of the 1 April 2015 valuation date for commercial rental values will become clearer when the draft List is published at the end of September 2016 and for sure when the actual rating revaluation commences in 2017.

If you require further guidance on your Business Rates revaluation, please contact us.